Letter Sent to President Obama Urges End to Japanese Trade Practices that Hurt American Automakers and Workers

U.S. Senator Debbie Stabenow, Co-Chair of the Senate Manufacturing Caucus, urged President Obama to oppose anti-competitive practices by Japan that hurt American automakers in a letter sent this week. American automakers face significant barriers to access in the Japanese market, while Japanese automakers have made significant headway into the American market. In the letter, which was also signed by nine other senators, Sen. Stabenow expressed her concern over including Japan in Trans-Pacific Partnership (TPP) negotiations unless Japan's anti-competitive practices are ended.

Sen. Stabenow saidin the letter: "American automakers face a number of barriers when it comes to access to Japanese markets. By contrast, Japanese automakers have made significant headway into our domestic markets....The history of U.S.-Japanese trade relations gives us little confidence that American negotiators can achieve an agreement that would create a truly level playing field between the two countries in the short timeframe of TPP negotiations."

The full letter sent by Sen. Stabenow and her colleagues to President Obama is below.

July 17, 2012

The Honorable Barack Obama

President of the United States

The White House

1600 Pennsylvania Avenue

Washington, D.C. 20500

Dear President Obama:

We are writing to express serious concerns about Japan's potential inclusion in the Trans-Pacific Partnership (TPP) negotiations. As Senators representing states in which the U.S. automotive industry has a strong presence, we are particularly worried about the impact that Japan's inclusion will have on American carmakers and their workers.

Japan has been a close friend and important ally to the United States in Asia, but our trade relationship remains complicated and unbalanced. This is especially acute in the auto sector.

As you are well aware, American automakers face a number of barriers when it comes to access to Japanese markets. By contrast, Japanese automakers have made significant headway into our domestic markets. According to the U.S. International Trade Administration, in 2011, our trade deficit with Japan was $63 billion, and nearly 70% of that deficit was due to automobiles. By comparison, U.S. and other foreign automakers comprise of only 5% of Japan's domestic market, while foreign automakers represent 55% of the U.S. market.

The United States has attempted to address this imbalance in past trade negotiations, but it has been unsuccessful. Japan has previously made concessions, including the elimination of tariffs on automobile imports. However, new barriers to trade have arisen to replace the old.

The U.S. should not sign a free trade agreement that will put American companies at a disadvantage with respect to their foreign competitors, especially American automakers. The American automotive industry plays a significant role in our local and national economy. Across the nation, American automobile manufacturers support over 3 million good-paying jobs in assembly plants, repair shops, and dealerships. The industry generates hundreds of billions of dollars in economic activity every year, and its recovery is crucial to our nation's economy. We should not do anything that might endanger that recovery.

The history of U.S.-Japanese trade relations gives us little confidence that American negotiators can achieve an agreement that would create a truly level playing field between the two countries in the short timeframe of TPP negotiations. As such we believe it would be a mistake to invite Japan to join the TPP at this time.